For Celldex Therapeutics (NASDAQ: CLDX), 2016 was a horrible year. The biotech stock dropped 77% after experimental vaccine Rintega flopped in a late-stage clinical study. Celldex entered 2017 with investors having both hope and fear. Unfortunately, fear outweighed hope for much of the year.
Celldex stock is down more than 15% so far this year despite several nice rallies during the last 11 months. Here's where things went wrong for the biotech in 2017.
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After the major Rintega setback in 2016, Celldex still had several pipeline prospects. The two most promising candidates were glembatumumab vedotin (glemba) and varlilumab (varli). These experimental drugs still are Celldex's best hopes for success, but the biotech reported somewhat disappointing news for one of them earlier this year.
On June 5, 2017, Celldex presented the phase 1 portion of data from a phase 1/2 study evaluating varli in combination with Bristol-Myers Squibb's (NYSE: BMY) Opdivo at the 2017 American Society of Clinical Oncology (ASCO) meeting in Chicago. Celldex stock had already begun to slide slowly in the weeks prior the presentation, but sank 12.5% the day following the ASCO presentation.
There had been reason to hope that the combination of varli and Opdivo would yield tremendous results. Opdivo has already proven to be effective at treating several types of cancer by inhibiting production of PD-1, a protein that tricks the immune system's T cells from recognizing and attacking cancer cells.
Varli stimulates activation and proliferation of T cells. It made sense that the two drugs could be more effective in tandem than working alone. However, in the phase 1 portion of Celldex's study, only three out of 36 patients experienced partial tumor shrinkage.
Celldex reported some good news from the study, though. The varli/Opdivo combo was well tolerated, with no evidence of toxicity. In addition, patients taking the combination of the drugs appeared to experience notable disease control -- defined as stable disease, or better, for at least three months. At the highest dose of varli, 40% of patients experienced disease control.
The disappointment from the early varli/Opdivo results was offset to some extent by more encouraging news for glemba. On the same day that Celldex presented the phase 1 results for the varli/Opdivo combo at the ASCO meeting, it also presented results from a phase 2 study evaluating glemba in treating metastatic melanoma. Data from this phase 2 study of glemba had already been announced in October 2016. However, Celldex provided an update that one patient converted from a confirmed partial response to a confirmed complete response.
These hints of potential for glemba in treating melanoma only added to the anticipation for the bigger prize for the drug -- treating breast cancer. For the last four years, Celldex has had a pivotal study known as Metric underway evaluating glemba in treating metastatic triple-negative breast cancer.
While Celldex stock never recovered from the June drop following the ASCO presentation for the varli/Opdivo combo, there were a few attempted rallies. Celldex announced on Aug. 23 that it had finally completed enrollment in the Metric study. This news led to a nice surge in the stock, but most of the gains faded after a few weeks.
The biotech's share price received another boost in early November when Celldex provided its third-quarter update. One likely reason driving the stock higher was the company's announcement of plans to initiate a phase 2 study of CDX-3379 in combination with Erbitux in treating head and neck squamous cell cancer and a phase 1 study of CDX-1140 in solid tumors.
What's next for Celldex
Celldex expects to announce top-line primary data from the Metric study of glemba in treating breast cancer by the second quarter of 2018. However, that date could be sooner or later, depending on the rate of events in the study. If the results for glemba are positive, Celldex could have its first drug on the market in 2019.
And while glemba clearly represents Celldex's best chances for success, opportunity remains for its other pipeline candidates. The company expects to complete enrollment in the first quarter of 2018 for the phase 2 study of varli in combination with Opdivo in treating metastatic melanoma. Even though the phase 1 results weren't all that impressive, Celldex thinks that alternating varli dosing regimens could optimize the potential for the combination with Opdivo.
It's true that 2016 was a horrible year for Celldex, and 2017 isn't turning out to be a very good one. However, 2018 just might be the best year ever for the biotech.
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